Revision of form requirements for an arbitration clause in Swiss international arbitration law
Switzerland has revised its international arbitration law during summer 2020. The revised provisions of the 12th Chapter of the Private International Law Act (“PILA”) entered into force on January 1, 2021. The article at hand offers a handy overview on the revised Art. 178 PILA[1] governing the form requirements from a thoroughly practical approach, focusing on its key changes and developments in international arbitration.
Read moreBe careful with carveouts: Your ability to arbitrate disputed payment claims might depend on it
What you need to know
In the rush to close a deal, dispute resolution clauses and arbitration agreements are often given little, if any, consideration. This can have serious consequences after the ink is dry.
Not only is it critically important to tailor your dispute resolution clause to suit your particular project, any agreement to arbitrate should clearly describe the types of disputes it is intended to cover and whether those disputes are required to be referred to arbitration.
As the WA Court of Appeal recently found, unless an arbitration agreement requires a dispute to be referred to arbitration, a court, in turn, will not have to refer the matter to arbitration under s.8 of the Commercial Arbitration Act 2012 (WA).
The Federal Arbitration Act Precludes New York from Exempting Claims from Arbitration
When parties to a contract agree to settle any claims that may arise between them through arbitration, the Federal Arbitration Act (the FAA) sets forth a national policy favoring arbitration. As a matter of public policy, however, New York has sought—through the 2018 enactment of §7515 of the New York Civil Practice Law and Rules—to exempt certain types of claims from arbitration, including claims alleging discrimination under the New York State Human Rights Law. Through §7515, New York seeks to provide those who claim to have been victimized by sexual assault a public forum in which to air their grievances.
Read moreSen. Warren Calls on FINRA to Investigate Robinhood
Sen. Elizabeth Warren, D-Mass., prodded Robert Cook, CEO of the Financial Industry Regulatory Authority, Thursday in a letter to “conduct a thorough review” of Robinhood’s activities during the GameStop trading frenzy.
In her letter, Warren also asked Cook to explain how FINRA will respond to Robinhood’s role “in recent market volatility, its decision to cut off customers’ trading, and the broader concerns about market fairness that these events represent.”
Read moreLawyer’s Advocacy in Arbitrations: The Top 10 Horrible, Terrible, No Good Mistakes Lawyers Make
There’s a great argument that lawyer advocacy in an arbitration is more essential than at a trial in court. This post is the beginning of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make in arbitrations, both when I served as counsel but primarily when I served as an arbitrator. Agreeing to arbitrate a dispute, whether in a contract or by agreement, is a serious decision for any business. There are pros and cons to binding arbitration versus trial in a court that go beyond a series of blog posts, but the fact is that when a dispute is arbitrated, finality is the rule. It is very difficult to appeal an arbitration award. In many instances, representing a party in an arbitration requires more due diligence and work than a trial. Great “arbitration” lawyering is therefore essential but many times does not happen.
Read moreCongress Eyes Arbitration Clauses in Employment Contracts
As Democrats in Congress craft an agenda in line with President Joe Biden’s stated focus on worker issues, they’re resurfacing long-standing efforts to address arbitration clauses in the employment context.
Controversial arbitration clauses in employment contracts are those that generally require those who sign them to agree not to pursue workplace disputes through lawsuits in court, and to instead pursue any claims through an arbitration process. By 2024, such agreements would apply to roughly 80 percent of private-sector employees not in a union, according to an estimate in May 2019 by the nonpartisan research nonprofit the Economic Policy Institute and the pro-worker social justice advocacy group The Center for Popular Democracy.
Read moreThe Federal No Surprises Act and Its Arbitration Provisions
On 28 December 2020, the federal No Surprises Act (Act)1 was enacted. The Act seeks to protect patients from so-called “surprise medical bills” in certain emergency and nonemergency settings for out-of-network patients. This alert focuses on the Act’s arbitration provisions but first provides necessary background to those provisions.
Read moreIf You Seek To Limit The Authority Of Your Arbitrators, Your Arbitration Clause Must Be Clear
In 2020, the Fifth Circuit Court of Appeals issued its decision in Soaring Wind Energy LLC (SWE) v. CATIS USA Inc., et al. In that case, the various members of a limited liability company (LLC) entered into an agreement to provide worldwide marketing of wind energy equipment and services. The agreement contained an arbitration clause that required all disputes between the parties to be arbitrated. The arbitration clause contained the following language.
Read moreDrafting Arbitration Clauses in IP Agreements
When drafting dispute resolution provisions, parties would do well to keep in mind the maxim ‘an ounce of prevention is worth a pound of cure’. Clear and thoughtful drafting helps to ensure the parties’ chosen method (or methods) for resolving disputes will function as the parties intended, is effective and maximises the likelihood that any disputes will be resolved in a timely and cost-effective manner. Poor or imprecise drafting risks the opposite because it invites arguments over the scope and operation of provisions and diverts resources away from resolving the merits of the disputes these provisions were supposed to settle.
Read moreAre foreign arbitration clauses in an online contract enforceable?
Entering into international contracts online is now a commercial fact of life. These contracts can be simple, such as the purchase of a pair of jeans by a consumer, or more complex service agreements between sophisticated legal entities. In both cases, it is customary now to ‘tick’ or ‘click’ a box to accept a set of terms and conditions, which may become binding whether or not they have in fact been read. These terms and conditions may also include a clause referring disputes to binding arbitration in a foreign country.
Read moreMandatory Arbitration Clauses Are No Longer Presumptively Enforceable
Last year, we reported on how Canadian courts will uphold mandatory arbitration clauses in some cases, depending on how the plaintiffs are classified.
In 2019, the Supreme Court of Canada held in TELUS Communications Inc. v Wellman that a mandatory arbitration clause found in telephone service contracts prevented a proposed class of business customers from advancing a class action proceeding against TELUS, but the same clause did not preclude a class action of consumers from bringing forward their claim. Mandatory arbitration clauses were only generally unenforceable against consumers under Ontario's Consumer Protection Act, 2002, and that other types of parties to an agreement, such as business customers, are held to the strict terms of a mandatory arbitration clause.
Read moreDrafting arbitration clauses: lessons learned in 2020
One of the many uncertainties of Brexit is the impact it will have on the enforcement of English court jurisdiction clauses and English court judgments across the EU. Despite the hopes of the legal community, the Trade and Cooperation Agreement does not contain any provisions on civil judicial cooperation, so there remains uncertainty over what will replace the previous regime as set out in the Brussels Recast Regulation and the Lugano Convention. The EU may agree to the UK acceding to the Lugano Convention but, for now, jurisdiction and enforcement of judgments will be determined by the Hague Convention on Choice of Court Agreements or national laws.
Read moreImposing virtual arbitration hearings in times of COVID-19: The Swiss perspective
On 6 July 2020 the Swiss Federal Tribunal has issued a decision in which it has held that the COVID-19pandemic does not serve as a sufficient justification to impose virtual hearings in state court proceedings against a party’s will. With a view to field of arbitration, the question thus arises whether the respective reasoning of the highest Swiss court may have any impact on the practice of arbitral tribunals seated in Switzerland.
Read moreCalifornia appellate court concludes lender’s arbitration provision unenforceable
On January 11, the Court of Appeals of the State of California affirmed the denial of an auto lender’s motion to compel arbitration, concluding that the arbitration clause was invalid and unenforceable. According to the opinion, in May 2019, consumers filed a class action complaint alleging the lenders charged unconscionable interest rates in violation of California’s Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). The company moved to compel arbitration, which the consumers opposed, arguing that the agreement was “procedurally and substantively unconscionable,” and that the California Supreme Court decision in McGill v. Citibank, N.A. (covered by a Buckley Special Alert here, holding that a waiver of the plaintiff’s substantive right to seek public injunctive relief is not enforceable) applied. The trial court denied the motion to compel arbitration, concluding that the McGill rule applied and that the injunctive relief provision could not be severed from the rest of the arbitration agreement because severability did not apply to the class waiver provision.
Read moreZynga granted limited discovery on player accounts in data breach cases
A federal judge has ordered Zynga Inc app users to give the company’s lawyers information associated with their accounts to help determine whether the users’ data breach claims belong in arbitration.
Read moreIndia: Arbitration Clause In An Unstamped Contract Is Valid
Nearly after a decade of deciding that an arbitration clause contained in an unstamped or deficiently stamped contract, is not valid and hence not enforceable until such deficiency is removed, in the case of SMS Tea Estates Vs. M/s Chandmari Tea Co. Pvt. Ltd.1, the Hon'ble Supreme Court overruled the said judgment in case of SMS Tea Estates (supra) and held that arbitration clause contained in an unstamped or deficiently stamped instrument, being an independent contract, is valid and enforceable. This has been held by a three judges' bench of the Hon'ble Supreme Court in the matter of M/s N.N. Global Mercantile Pvt. Ltd. Vs. M/s Indo Unique Frame Ltd. & Ors2. After holding as above, the Apex Court also referred the findings of a coordinate bench in the judgment of Vidya Drolia & Ors. v. Durga Trading Corporation3 to a constitution bench of five judges, for authoritative decision on the following question:
Read moreBringing a Case to Arbitration Should be Easier Following Recent Ninth Circuit Decision
A plaintiff may not avoid arbitration and manufacture appellate jurisdiction simply by voluntarily dismissing his claims, the U.S. Ninth Circuit Court of Appeals recently decided. In doing so, the court stated that an earlier Ninth Circuit decision reaching the opposite conclusion had been effectively overruled by intervening U.S. Supreme Court precedent. The Ninth Circuit’s new ruling will make it easier for parties seeking to enforce arbitration agreements.
Read moreCourt Rejects Bid to Move BIPA Case to Binding Arbitration, Declining to Enforce Arbitration Clause in Terms of Service
CPW has previously covered how companies can proactively use binding arbitration agreements to manage litigation risk-including in the context of data privacy litigation. But as a biometric software developer just learned, if you’re not a signatory to the agreement, you better make sure the arbitration clause is drafted broadly enough to cover you to avoid litigating Illinois Biometric Information Privacy Act (“BIPA”) claims in court. Last week in Sosa v. Onfido, Inc., 2021 U.S. Dist. LEXIS 658 (N.D. Ill.), a judge in the Northern District of Illinois refused to motion to compel arbitration for litigation brought under BIPA, finding that the arbitration agreement did not cover the defendant. Read on below.
Read moreWhat Do Investor-State Arbitration Laws Mean For Your Business
The global market has enabled large corporations to expand into foreign territory. Yet many corporate entities are finding foreign states are clipping their wings and preventing an equal playing field with the homegrown competition.
Consequently, the International Chamber of Commerce (ICC), introduced investor-state arbitrations laws to that enabled foreign investors to challenge States that impose unfair advantages through laws and administrative procedures that do not apply to national companies.
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